Globalization has led to reductions in global poverty and improvements in quality of life. While the wealth gap between the richest and poorest has narrowed, the proportion of people living in extreme poverty has fallen as national incomes have risen. Australia has embraced globalization through open trade policies, foreign investment, and immigration. It has competitive advantages in its openness, IT readiness, and culture that have supported the growth of globalized industries like mining, agriculture, manufacturing, and services. Looking ahead, Australia is well-positioned to continue thriving in an increasingly globalized world driven by information technology.

1. Globalization and Australia Alan Oxley Australian APEC Centre, Monash www.worldgrowth.org

2. Three aspects The impact of globalization What is globalization Impact on Australia

3. What is the impact of globalization?

4. The wealth gap is narrowing Gap between richest 20 percent and poorest 20 percent falls - from 15 to 1 in 1970 - to 13 to 1 in 1997 - i.e. by 10 percent

5. Incidence of poverty is falling 24% 28.3% WORLD 46.3% 46.6% Sub-Saharan Africa 5.1% 0.2% Europe/Central Asia 11.3% 23.9% (- China) 15.3% 26.6% East Asia 1998 1987

6. Quality of life improving 67%bb 80% Global literacy 67 44 Infant survival rates/1000 66 58 Average life expectancy 810m 920m People undernourished 1990’s 1970

7. Countries open to trade grow faster

8. The evidence shows that the poorest people within countries share in the gains from national income growth. Generally, as a country ’s average income rises,the poorest share proportionately in those gains. More specifically,the poorest 20 per cent in an economy gain by the same percentage as the country does. And as a country ’s average income per person rises,the proportion of its population living in extreme poverty falls.

9. What is Globalization? Defining it The drivers The effects

10. Defining globalization An open economic system Non-discrimination Global brands Global structures

11. The Drivers Cheap travel Trade liberalization Information technology High technology

12. Exports % share of world production

13. Annual % Growth of trade and GDP 1959 – 96

14. US investment now more global Percentage of foreign stocks held by US investors Ten percent One percent 1996 1975

15. Effects of globalization On business On work

16. Effects of globalization on business Cheap offshore production Reduced transport costs Virtual communication Standardization of logistics Global marketing

17. Bigger and smaller Greater scale in manufacturing - commodities are globally priced Specialization in manufacturing Globalization of specialist manufacturing

18. New importance of Brands Selling Fords like Coca Cola? - Ford sold its components business for $1.5 billion - That business, Visteon, supplied 22% of a new Ford vehicle - Ford spent $9 billion buying brands: Jaguar and Volvo

19. Globalized business Greater specialization of production - Hewlett Packard More outsourcing – Soap and medicines Greater increase in brand values - LG New technology niches – steel mini mills

20. Effects of globalization on work Jobs in services rather than manufacturing Workers provide services rather than “do a job” End of “lifetime” employment Individuals manage more of their own affairs

21. A globalized world Greater freedom of movement of goods, services, capital, people Global citizens The Information Age – has only just begun

22. Australia and Globalization How is Australia positioned? Examples of globalized industries The Future

23. Australia: globalization’s child Australia has grown on - trade - foreign investment - immigration - adaptation of technology Australia is the branch office model of development

24. Australia’s position Openness IT/E readiness Culture

25. Australia’s openness One of the most open economies in the world - average tariffs – 5 percent - open financial and telecoms - open to foreign investment

26. Australia’s IT/Ereadiness Source: Economist Intelligence Uni t 7.87 7 Singapore 7.89 6 Sweden 8.07 5 Norway 8.09 4 Canada 8.10 3 UK 8.29 2 Australia 8.73 1 US Score (of 10) Ranking

27. Australia’s globalized economy Global industries - mining and agriculture Services – distribution, logistics, transport, financial services Manufacturing – a new contender

28. Manufacturing exports

29. Globalized industries Toyota - manufactures and exports a global car Howe Leather – a tier one supplier to Ford Rosemount/Southcorp – exporter & offshore producer Westfield – real estate management

30. The future The information Age - computing power continues to expand exponentially - More global distribution of activity - Greater interconnectivity - Bigger organizations - Greater fragmentation - Greater personal freedom

31. Australia ready to thrive Globally oriented economy High adaptation of IT Workforce adjusting Open society

32. www.globalizationguide.org